XCHRX WONG SAU KAM AND ANOTHER v. SHUM YUK FONG AND OTHERS

HCPI 798/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO.798 OF 1998

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J U D G M E N T

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1. There is before me an application for summary judgment under Order 14 as well as an application for interim payment under Order 29 of the Rules of High Court. Both these applications were taken out by the plaintiffs and both were directed only against the 1st defendant in this case although there are other defendants involved.

2. This is a fatal accident in which the plaintiffs are claiming damages on behalf of the dependants of Yeung Ki Yee, deceased, as well as on behalf of his estate. The claim arose as a result of an accident which occurred at about 6.15 p.m. on 15 November 1995 when a section of an unauthorized canopy erected outside Chung Hing House projecting over Yan Oi Court collapsed onto the deceased, causing him severe injuries from which he subsequently died. At the time of the accident, the deceased was exercising his public right-of-way and walking along Yan Oi Court, the 1st defendant was at the material time (and is still presently) the registered owners of Shops F, G and H on the Ground Floor of Chung Hing House. It was the unauthorized canopy over these shops which collapsed and fell on the deceased who was walking along Yan Oi Court.

3. The accident was investigated by the Buildings Department which prepared a report on the collapse. Those investigations revealed that the collapsed canopy was a metal truss type structure, about 11 metres in length, which projected approximately 2.7 metres from the face of the building at a height of approximately 3 metres above ground level. The trusses were in a rusty and dilapidated condition and the unauthorized canopy was built on and projected from the authorized canopy which was situated at the first floor level projecting over Yan Oi Court. This unauthorized canopy extended for the full length of the building with a projection of 3 feet. The conclusion reached in this investigation by the Buildings Department was that the collapse was caused by :

(a) inadequate number expansion anchor bolts from each steel angled truss to the subject building ..... a minimum of four expansion anchor bolts having a full structural bonding would be needed for each truss whereas only two had been used;

(b) lack of proper structural design;

(c) poor workmanship; and

(d) lack of maintenance.

4. The plaintiffs also obtained an expert report from a Mr Robert Watkins, a chartered engineer and registered structural engineer on the collapse. In his report dated June 2000, he stated that the unauthorized canopy which collapsed was attached to Nos.19 to 23 Yan Oi Court which corresponded to Shops F, G and H on the Ground Floor (i.e. those shops of which the 1st defendant was the registered owner). The extended canopy was unauthorized and extended the span of the original authorized canopy. Mr Watkins further noted that it was likely that tarpaulin was used to cover the exposed remainder of Yan Oi Court by attaching it to the unauthorized canopy on one side and to the building on the other side of the thoroughfare, thereby providing shelter to customers of the restaurant at Shops F, G and H, who used the outside area of the pavement. In so far as the cause of the failure of the unauthorized canopy goes, Mr Watkins was in total agreement with the findings by the Buildings Department in their investigation. Mr Watkins attributed blame substantially for the collapse to the building owners and tenants for failing to properly maintain the original canopy and the unauthorized canopy and they had allowed them to become a danger to the public. He further found that the owners of Chung Hing House appeared to have exercised no control over the erection of the various unauthorized canopies and that even if the unauthorized canopies had been safe when erected, the owners of Chung Hing House had taken no steps to maintain the external wall, the original canopy, or the unauthorized canopy, so as to ensure that it would remain safe.

5. There is a Deed of Mutual Covenant governing Chung Hing House under which the owners of Chung Hing House are under a duty to properly maintain the common areas thereof.

6. At the time of the collapse, Shops F, G and H had been let by the 1st defendant to the 2nd defendant. Under the terms of the lease current at the time of the accident, whilst the 2nd defendant as tenant had undertaken to keep all the interior of the leased premises in good and proper repair and condition, the 1st defendant, as landlord, had reserved the right to enter and view the state of repair of the leased premises and to :

"... carry out any repairs to the main walls timbers or structure thereof and also to amend and repair any defects for which the Tenant is liable and which he has failed to amend and repair in a proper and workmanlike manner within 30 days of the receipt of notice thereof from the Landlord and to pay the Landlord's cost of carrying out any such repairs or work in connection with any such notice as aforesaid." (Clause 5(k) thereof refers)

7. The plaintiffs' case as pleaded relies on negligence, nuisance, breach of statutory duty, as well as the rule in Rylands v. Fletcher. For the present application for summary judgment, however, the plaintiffs are content to rely only on negligence and nuisance.

8. The 1st defendant's defence as pleaded was that the unauthorized canopy had already been erected when she became the registered owner of Shops F, G and H and that she did not cause or permit the unauthorized canopy to be erected. It is also pleaded that the unauthorized canopy did not form part of Shops F, G and H. The 1st defendant's defence also relies on latent defect of the collapsed unauthorized canopy.

Plaintiffs' Order 14 application

9. The plaintiffs' application for summary judgment against the 1st defendant is put on the premise that the 1st defendant is liable irrespective of whether the collapsed unauthorized canopy is a part of the premises forming Shops F, G and H, or whether it is part of the common area of the building. The plaintiffs argue that if the unauthorized canopy formed a common part of the building because of its attachment to the original authorized canopy, which was a common part, then the 1st defendant, as owner of Shops F, G and H, is under an obligation provided for by the Deed of Mutual Covenant to keep the external parts of the building in good tenantable repair and condition. On the other hand, if the use of the unauthorized canopy by the tenant of the 1st defendant of Shops F, G and H constitutes an encroachment of what would otherwise be a common part of the building, then the 1st defendant, under the terms of the tenancy agreement, has the right to enter the premises including the encroached area to carry out repairs thereto. Therefore the plaintiffs say that, looked at in that light, irrespective of whether the unauthorized canopy formed part of Shops F, G and H, or was a common part of the building, the 1st defendant, whether in her capacity as landlord of Shops F, G and H, or in her capacity as an owner of Shops F, G and H of the building, must be liable to the plaintiffs for the accident which caused the death of the deceased.

10. The plaintiffs further rely on the fact that the collapse of the canopy is itself prima facie evidence of negligence which should not have happened in the normal course of events if the canopy had been properly maintained. Moreover, since the unauthorized canopy projected over Yan Oi Court, a public right-of-way, then the dangerous state of the unauthorized canopy before its collapse constituted a nuisance.

11. The last point taken by the plaintiffs is that the defence as pleaded appears to be that the unauthorized canopy was already there when the 1st defendant purchased the premises of Shops F, G and H in 1976 and that she did not herself cause or permit the unauthorized canopy to be erected. This, the plaintiffs submit, does not constitute a valid defence in law. The plaintiffs rely on the principle laid down by the House of Lords in Sedleigh-Denfield v. O'Callaghan [1940] AC 880 at p.905 where Lord Wright said :

"If the Defendant did not create the nuisance he must, if he is to be held responsible, have continued it, which I think means simply that he neglected to remedy it when he became or should have become aware of it."

In this context, the plaintiffs further seek reliance on the witness statement of the 1st defendant dated 7 April 1999 where the 1st defendant stated at para.3(c) :

"Throughout the years, as far as I know, there had never been any works done to the said canopy nor had I been asked directly or indirectly through the various said Tenants and/or the owners of the neighbouring shops to do so. I had never paid any money for the upkeeping cleaning maintaining and/or otherwise of the said canopy. I have never been told by any of my said Tenants and/or the owners of the neighbouring shops of any need to maintain the said canopy. ...."

12. Upon the above arguments, the plaintiffs submit that the 1st defendant has failed to raise any triable issue on liability and that interlocutory judgment for damages to be assessed should be entered in this case.

13. Turning now to deal with the defence submissions. Firstly, the 1st defendant submits that the collapse of this unauthorized canopy was due to a latent defect. In so saying, the 1st defendant relies on the investigation report of the Buildings Department (adopted by the plaintiffs' own expert) which states that one of the cause of the collapse was due to insufficient anchor bolts. Secondly, the 1st defendant also relies on the fact that one week before the collapse itself, the unauthorized canopy was in fact the subject of an inspection by officers from the Buildings Department, yet these officers were unable to discern the fact that the unauthorized canopy was either in a dangerous or unstable state or was close to collapse. This is a matter, says the 1st defendant, which goes to show the lack of knowledge of the 1st defendant as to the state of the canopy at the material time.

14. Secondly, the 1st defendant says that although she was the registered owner of Shops F, G and H, having leased these shops out to the 2nd defendant, she, as the landlord, did not have the use, control or occupation of the unauthorized canopy, without which she was under no legal duty to maintain the same.

15. Thirdly, the 1st defendant reiterates what had been pleaded in her defence, namely, that the unauthorized canopy was erected by somebody other than herself and was already there when she purchased these shop premises in 1976.

Decision

16. Clearly the one most important factor in a case such as this one is the knowledge of a defendant. In order for the plaintiffs to prove liability, whether for negligence or nuisance, against any of the defendants including the 1st defendant (for present purposes), it must be shown that that defendant knew or ought to have known of the dangerous state of the unauthorized canopy, that he/she had a duty to maintain or to remove the danger but did nothing about it. Although it may be inferred from the 1st defendant's witness statement that she knew of the existence of the unauthorized canopy when she purchased Shops F, G and H in 1976, there is little evidence to show what is her knowledge of the state of the unauthorized canopy at or near the time of its collapse. On the other hand, there is exhibited before me a witness statement of Chong Yuk Lung to the 2nd affidavit of Anna Majella Walsh on behalf of the plaintiffs. In November 1995, he was a structural engineer with the Buildings Department attached to the Dangerous Building Section. He was the person who took part in the inspection of the unauthorized canopy over Shops F, G and H of Chung Hing House about one week before its collapse. He stated in his statement that "At the time of inspection, there was no sign at all of instability or undue movement". He also stated later on "As no sign of imminent danger could be observed, I had not initiated any remedial action". This statement, if accepted, would show that a qualified person upon a close examination of the canopy in question about one week before its collapse could find no outward signs of instability or imminent danger and can be very strong evidence in the 1st defendant's favour.

17. Knowledge is a matter to be inferred from all the existing circumstances and it would be wrong for me at an interlocutory stage to infer the 1st defendant's knowledge of the dangerous state of this canopy from affidavit evidence when that is a matter in dispute.

18. The plaintiffs have argued their case on the basis irrespective of whether the unauthorized canopy is to be regarded as being part of the common area of the building, or whether it is part of the shop premises of Shops F, G and H, however, that argument, if accepted, only goes to show a legal duty upon the 1st defendant to maintain and keep the unauthorized canopy in good repair. In order to show a breach of such duty, if there was one, the plaintiff has also to show that the 1st defendant was aware, or ought to have known of the danger the unauthorized canopy constituted. That argument, therefore, does not show knowledge on the part of the 1st defendant.

19. Moreover, in putting forward that argument, the plaintiffs say that the unauthorized canopy can only be either a common part of the building, or a part of the shop premises of Shops F, G and H. I am not entirely certain that that is right. The unauthorized canopy was erected and attached to the original authorized canopy. Presumably on the evidence before me, it was erected by some person or persons before the 1st defendant became the owner of Shops F, G and H in 1976. There is no evidence to show that when she became the owner of Shops F, G and H, she had also taken over the unauthorized canopy. Whilst it may be possible that the 2nd defendant, as the tenant of Shops F, G and H, may have made use of the unauthorized canopy, there is again no evidence to show that the 1st defendant knew of such encroachment, if there be encroachment, by the 2nd defendant. In the circumstances, it is not inconceivable that the unauthorized canopy was not a common part of the building and was also not a part of the shop premises of Shops F, G and H, but remained an unauthorized structure made use of by the 2nd defendant after he became the tenant of Shops F, G and H. On that footing, the 1st defendant cannot be said to have the use, occupation or control over the unauthorized canopy but only the 2nd defendant would have the use, occupation or control of it.

20. Thirdly, Sedleigh-Denfield v. O'Callaghan cannot assist the plaintiffs at this stage even on the principle enunciated in that case. The knowledge by the defendant of the danger created by a third party on his premises is a matter which has to be proved before liability can be attributed to the defendant. Therefore it goes back to the question of knowledge which I have already dealt with above.

21. I need hardly repeat what these courts have said time and again that it is only in clear cases, where there can be no defence and no triable issue, that courts would order summary judgment. Although the plaintiffs may consider that they have a strong case against the 1st defendant as opposed to the other defendants, that, by itself alone, is not sufficient to warrant summary judgment. Accordingly, I shall grant unconditional leave to the 1st defendant to defend this action.

Interim payment

22. There seems to be conflicting decisions in England as to the proper relationship between summary judgment and interim payment. In Ricci Burns Limited v. Toole and Another [1989] 3 All ER 478, the English Court of Appeal held that the court could make an interim payment order under Order 29 against a defendant even though it had been held that he was entitled to unconditional leave to defend under Order 14 since there was no inconsistency in the fact that evidence which showed that the defendant had an arguable defence sufficient to warrant unconditional leave to defend could, at the same time, also satisfy the court, for the purposes of making an interim payment order, that the plaintiff would succeed in obtaining judgment against the defendant, given that the necessary standard of proof of success against the defendant, although high, was a civil burden on the balance of probabilities and not a criminal burden requiring proof beyond reasonable doubt. However, in the later case of British and Commonwealth Holdings Plc v. Quadrex Holdings Inc. [1989] 3 All ER 492, a differently constituted Court of Appeal in England held that the court had no jurisdiction to make an order for interim payment under Order 29 where a defendant had been given unconditional leave to defend under Order 14 because the court could not be satisfied on the one hand that the plaintiff would succeed at trial, and on the other hand that the defendant had an arguable defence sufficient to warrant unconditional leave to defend. In that case, the decision in Ricci Burns Limited v. Toole was not followed.

23. Having read both judgments, I prefer the reasoning of the Court of Appeal in British and Commonwealth Holdings Plc v. Quadrex Holdings Inc. However, should I be wrong on that, the making of an interim payment order is essentially an exercise of discretion. In exercising my discretion in this matter, I take into account the following matters.

24. Firstly, although the plaintiffs' case, when viewed generally, is such that the plaintiffs would unlikely walk away from court without redress and that there can be no question of contributory negligence on the part of the deceased who was crushed underneath the falling canopy, the fact remains that this application for interim payment is only made against the 1st defendant where seven defendants have been sued by the plaintiffs. On the evidence as at presently stands before me and as already indicated when dealing with the summary judgment application, I cannot be satisfied at this stage that the plaintiff would obtain judgment against the 1st defendant. I also take into account that this case has reached a stage where the trial would not be far off. Indeed, a pre-trial review had been set for July of last year, but because of these applications and another application by the 7th defendant, the pre-trial review hearing had been deferred. Once these matters can be disposed of, the pre-trial review hearing can be proceeded with and the trial should come on within the next six months.

25. For these reasons, I am not disposed to making an order for interim payment as asked for by the plaintiffs. The plaintiffs' application for interim payment is therefore dismissed. I shall now hear the parties on costs in respect of both applications.